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The Kentucky Opportunity Coalition is founded on the basis of putting people above politics and solutions above spin. The coalition will propose public policy changes and seek their implementation in a non-partisan manner.

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Monday
Oct052009

Herald Leader: Clark County's Schools

Interesting article from the Herald-Leader over the weekend:

WINCHESTER — When teachers crank up the computer lab's air conditioning at Central Elementary School, someone must plop a bucket in the hallway to catch the condensation water that starts falling from the gaping hole in the ceiling.

At nearby Fannie Bush Elementary School, dozens of desks are pushed together in classrooms nearly 20 percent smaller than recommended. The 275 students share one set of boys and girls bathrooms. Some classes are held out back in rotting, wind-rattled trailers.

Built more than half a century ago, Central and Fannie Bush are two of 18 Kentucky schools currently classified as Category 5 by the state Education Department.

On a 1-to-5 scale, they are the oldest and most decrepit of the state's roughly 1,200 school buildings. All are at least 40 years old. Some date back to the 1920s, with creaky wood floors, leaky roofs, inadequate coal-fired heat and antiquated plumbing. Few have classrooms of sufficient size or that are wired for modern teaching standards.

The schools briefly were in the news in June as the legislature debated allowing slot machines at racetracks. House Speaker Greg Stumbo said his slots bill would generate $850 million to replace all schools in Category 5 — Stumbo called them "awful" — and some of the nearly 200 schools in Category 4 that are barely any better.

But the slots bill died, and the legislature adjourned until January.

Meanwhile, thousands of children started classes this fall at crumbling, cramped schools. This comes 20 years after the state Supreme Court ruled in a landmark school-funding decision that "students must be given equal educational opportunities, regardless of economic status or place of residence."

Most Kentucky schools are in categories 1, 2 or 3, which means they're in excellent, good or average shape. They were built in the last 30 years or had major renovations.

In prosperous Fayette County, for example, three-fourths of schools are in categories 1 and 2. But poor and rural Robertson County has a single school to hold all grades. It was built shortly after World War I, and it's a Category 5 with a laundry list of problems that complicate daily life for students.

"We've tried to add on where we could and do repairs. But at some point, there's not a lot more you can do for an 80-year-old building other than keep repainting it," said Jeremy McCloud, principal of Robertson County's Deming School.

Finding the money

State and local school officials and lawmakers say they're trying to address the problem of aging schools as best they can given the sour economy.

Kentucky has seen progress in replacing or renovating Category 5 schools, although that's small consolation to a child now enrolled in one, said Mark Ryles, facilities management director at the state Education Department.

The number of such schools has dropped by nearly half since 2003, when the legislature established the Urgent Needs Trust Fund. In three rounds of funding, ending in 2006, lawmakers approved $275 million in bonding authority to address many of the worst schools in more than 50 school districts, according to the department.

However, lawmakers say they're unable to replenish the fund because there is no more money or bonding capacity. House Democrats unsuccessfully sponsored a bill last winter to appropriate tens of millions of dollars for Category 5 schools in a few specific counties.

Inaction aggravates the problem, said Rep. Tommy Thompson, D-Owensboro, who chairs the House budget subcommittee for education.

Every year, Category 4 schools grow older and more decrepit, Thompson said. The state uses architectural surveys to classify the schools, but many lawmakers suspect they have Category 4 schools in their districts that should be dropped one rank and replaced, he said.

"We all agree that we really need to revisit this," Thompson said. "It's critical that we give our children the best environment in which to learn. Unfortunately, we sometimes fail to do that."

Stumbo, the Democratic House speaker from Prestonsburg, said he still hopes for revenue from slot machines, which the Republican-led Senate is blocking.

"I still think the best way to fund Category 5 schools is through expanded gaming," Stumbo said. "When the dynamics change in the Senate — and I'm convinced they'll change — that bill will pass."

Local obstacles

Part of the problem in addressing Category 5 schools lies in the state asking for more than local school officials say they can give.

The state Education Department spends about $600 million a year on school construction through several funding streams, not all of which take into account a school district's wealth or poverty, Ryles said.

School districts are expected to bring money to the table for their projects, which is why the legislature should require participating districts to up the minimum property tax that funds school construction, Ryles said.

At present, he said, the majority of districts levy a 5-cent tax on every $100 in assessed property value to fund school facilities. Other districts get 10 to 15 cents and, therefore, can afford to build more. The state Education Department wants the minimum tax rate set at 10 cents.

However, school officials in poor districts say it's next to impossible to find the local money to go along with state funding.

Robertson County, for instance, was given $5 million from the state's Urgent Needs Trust Fund to replace its school. But a new school could cost $20 million, said principal McCloud. Unable to make up the difference, the county stares at the $5 million sitting in an escrow account in its name.

"We have 2,200 people living here, and we just don't have that kind of tax base," McCloud said.

Also, to cut costs, the state asks districts to consolidate smaller schools. It makes no sense to spend $10 million or more replacing an old school with a dwindling student population when it can be merged with a newer, larger school in the area, Ryles said.

Consolidation causes its own headaches.

Families near small schools get angry when a closing is announced and the district plans to bus their children elsewhere. Some rural school superintendents say it isn't realistic to shutter their Category 5 school and send children elsewhere because the next school is nearly an hour's drive away.

Finally, in the legislature, talk about school construction leads to partisan wrangling over the state's prevailing wage law, which mandates higher pay for workers on major construction projects built with public funds.

Generally, Democrats support the law and Republicans fight for its repeal. Echoing the GOP, 96 percent of school officials in a 2001 Legislative Research Commission survey said the prevailing wage drives up their project costs; only 4 percent said it improves quality.

While policy-makers decide their next step, Fannie Bush Principal Angela Taylor squeezes a 54th year out of her Winchester school. The few closets are converted for other uses, such as a nurse's station. The cafeteria doubles as the gymnasium once tables are removed so children can exercise.

"For us, the biggest issue is space, in that we don't have any," Taylor said. "We do the best we can. We're getting good at that."

 

Wednesday
Aug052009

CNBC: Kentucky's Rankings

Let's dig a little deeper into the CNBC Rankings for Kentucky's business climate:

Cost of Doing Business -  2009 Rank: 8th   2008 Rank: 14th

Workforce - 2009 Rank: 19th   2008 Rank: 20th

Quality of Life - 2009 Rank: 46th   2008 Rank: 40th

Economy - 2009 Rank: 44th   2008 Rank: 45th

Transportation & Infrastructure - 2009 Rank: 4th  2008 Rank: 6th

Technology & Innovation - 2009 Rank: 32nd   2008 Rank: 38th

Education - 2009 Rank: 35th  2008 Rank: 38th

Business Friendliness: 2009 Rank: 31st  2008 Rank: 28th

Access to Capital - 2009 Rank: 33rd  2008 Rank: 22nd

Cost of Living - 2009 Rank: 9th  2008 Rank: 18th

There isn't an exhaustive explanation that we have been able to find yet to explain all the factors in these categories. We'll keep looking.

Looks like we have Cost of Living and Transportation covered. Business Friendliness and Access to Capital seem to be the most likely to be impacted in the short run by public policy.

All very interesting.

Monday
Aug032009

CNBC: Top States for Business Survey

The rankings are in for 2009. Kentucky finished a respectable 34th - respectable here being defined as not being in the bottom ten. Though compared to our surrounding states, again improvement is needed. Here are how we stack up against them - with their national ranking in parentheses.

Virginia (1)

Missouri (14)

Indiana (15)

Tennessee (20)

Illinois (25)

Ohio (29)

Kentucky (34)

West Virginia (46)

Interestingly - Alabama & Mississippi finish well below Kentucky - 39th and 45th respectively. And yet, over the last ten years or so, those states have beaten us when competing for big automotive investments. Policymakers should be asking this question: why?

Friday
Jul312009

KY's Tax Burden - Another Way to Look at It

Of our surrounding states, Kentucky places the second highest tax burden upon its citizens.

State and local taxes extract 3.4% of Kentuckian's disposable income. Only Ohio, at 3.7%, comes in higher. Virginia also comes in at 3.4%.

The others: West Virginia - 2.8%; Missouri - 2.8%; Indiana - 2.8%; Illinois 2.1%; and Tennessee - 0.3%.

Yes - you read that right. It caused us to wonder if the formula was correct but we re-ran the numbers. Tennessee's state and local government extracts less than 1% of personal disposable income from its citizens. This may be one big reason why Tennessee's growth in gross state product has blown KY away for the past decade.

Thursday
Jul302009

Kentucky's Economic Growth: Needs Improvement

According to data from the Bureau of Economic Analysis, a federal agency, Kentucky has lagged in economic growth for the past decade, when compared to our surrounding states and the Southeast U.S. as a whole.

State              Growth in GSP*

Virginia             87.3%

Tennessee       64.3%

West Virginia   58.9%

Illinois              56.9%

Indiana            51.6%

Missouri           50.3%

Kentucky          47.9%

Ohio                 41.9%

- - - -

SOUTHEAST REGION   75.1%

- - - -

There are many variables that contribute to these types of trends. What is clear is that Kentucky needs to take a serious look at its business and entrepreneurial environment.

It should be expected that Virginia and Illinois are ahead of us - given the Chicago and D.C. metropolitan regions within those states.

But West Virginia growing by 10+ better points? Tennessee by 17+ points?

Are Kentucky's economic development leaders examining these issues? We certainly would encourage them to do just that.

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* GSP - Gross State Product 1997 - 2008.